Only 56 of 175 Euro Zone Firms Raise Prices After Iran War as Demand Stays Weak
Updated
Updated · Reuters · Jun 2
Only 56 of 175 Euro Zone Firms Raise Prices After Iran War as Demand Stays Weak
4 articles · Updated · Reuters · Jun 2
Reuters’ review of 175 euro zone earnings calls found only 56 companies had raised or planned price hikes after the Iran war, far below the post-Ukraine pattern and signaling limited pass-through so far.
Weak household demand, slower growth and less fiscal support are blunting pricing power; euro zone inflation started this shock at 1.9%, versus 5.9% when Russia invaded Ukraine, and is seen at 3.2% in May.
Price increases are concentrated in industrial and raw-material sectors such as BASF and Nexans, while consumer-facing groups including Delhaize and Volkswagen are keeping prices low or cutting costs instead.
The findings support ECB patience beyond a widely expected first rate hike next week, though economists warn fuel surcharges and other sector increases could still feed into broader inflation over the next 2 to 15 months.
Why can industrial firms raise prices during the Iran war while consumer brands can't?
Is the ECB risking a deep recession by hiking rates into a weak, stagflationary economy?